Monday, November 16, 2015

JPY: Events to keep your eye on for this week – Deutsche Bank

FXStreet (Delhi) – Taisuke Tanaka, Strategist at Deutsche Bank, believe the USD/JPY will trend upward to the ¥125-130 range next year in line with the buoyant US economy and anticipated Fed rate hikes.

Key Quotes

“That said, we do not expect an unbroken uptrend. We have thus recommended that investors build tactical longs in the USD/JPY by buying on dips. We believe this approach will deliver good performances on a quarterly and semiannual basis amid the large upward and downward swings in the market.”

“Japan's 3Q GDP was revealed today to have dropped an annualized 0.8%, badly affected by inventories, imports and capex, marking a second consecutive quarterly decline. The resulting expectations for another easing at the BoJ's Monetary Policy Meeting this Wednesday and Thursday should support the USD/JPY somewhat (though most market participants expect the BoJ to maintain its current policy as they are watching the government-industry talks on wages).”

“We expect the minutes of the recent FOMC meeting (Wednesday) and ECB meeting (Thursday) to reaffirm comments by leaders of both banks hinting strongly at a rate hike and further easing within this year, respectively. This should ensure further dollar strength and euro weakness. US data this week include the CPI and production tomorrow and housing starts on Wednesday, but the markets are not expecting figures as a whole power enough to fuel a higher dollar.”
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